Worcester, Droitwich & Malvern Market Update – July 2022
COMMENT
Each month we physically deliver 26,000 copies of this market update, across Worcestershire, because we want to keep you informed. The question any estate agent will get asked the most is “how is the market?” So we make it our business to know and have the evidence to back up our views, something it would appear is not quite so important in some parts of the media.
It’s true the Bank of England increased base rate to 1.25% in June, with another 0.5% rise forecast before the end of 2022. We think this could be higher, with the potential for a further 1% to come this year. However, there is a huge variety of mortgage products available out there and 92% of new mortgage borrowers (taken over the last 5 years) have chosen fixed rates which offer protection against these fluctuations.
The market, formerly described as ‘white hot’ is probably now more ‘redhot’. There is still a supply and demand issue, therefore prices are not likely to drop, they may just not climb so fast. Looking five years ahead, now is the best time to buy and clearly a great time to sell. There are plenty of buyers very keen to make a move.
Come and talk to us about your plans and we’ll be delighted to answer any other questions you may have.
LOCAL MARKET ROUNDUP
The latest Land Registry figures, for the year ended 31st March 2022, indicate there were 3984 sales in Worcestershire, 18.4% fewer than the previous year; reflecting the spike in activity caused by the end of the stamp duty holiday. 599 sales in Malvern represents a reduction of 19% and 1778 sales in Worcester is 13% lower. 387 sales in Droitwich, represents a significant reduction of 35% and is well below the pre-pandemic average boosted by a significant number of new build properties coming to the market at that time.
Average house prices have increased significantly across the county in the last twelve months with Malvern rising 9% to £291K with Droitwich sitting at £268K. In Worcester, where 44% of the sales took place, the average sales price now stands at £237.6K.
The lettings picture has been fluctuating over the last twelve months, with an increase of 5% recorded in the average figure for Worcester. Droitwich, after cooling recently, sits at £743, 4% below the Worcestershire average, whilst Malvern stands just 1% above it at £785.
NATIONAL MARKET
The average price of a property rose by 12.4% in the year to April. Month-on-month average prices rose by 1.1% (ONS). While month-on-month average asking prices for newly marketed properties continue to rise, Rightmove report the pace of price growth has slowed, up just 0.3% in May, the smallest rise since January.
Zoopla predict that property price growth will moderate to 3% by the end of 2022. Annual price growth in the year to April was 8.4% a softening from 9% in the year to March.
Properties are currently selling 20 days quicker than the long term average (Rightmove), with a significant proportion selling above initial asking price (Dataloft poll of subscribers). Needs-based buyers are the most active in the market place at the current time.
ECONOMY
The Bank of England has raised the base rate of interest to 1.25%, its highest rate in 13 years. This represents the fifth consecutive increase since December as the Bank aims to control inflation, which is expected to rise to 11% by October.
The UK economy shrank by 0.3% in April, following a 0.1% in March according to the latest data from the OND. Forecasts for the UK economy for 2022 and 2023 have been downgraded in recent weeks as households and businesses grapple with rising prices.
Fuel prices have hit record levels. As Brent oil prices continue to rise, the average price of diesel is up over 50p per litre compared to year ago petrol up 45p, the price to fill an average car now around £100.
LETTINGS MARKET
Average rents across the UK rose by 2.7% in the year to April according to latest figures released by the ONS. Excluding London at 3.4% annual rental price growth is twice the level of a year ago. The ONS index includes both rent renewals as well as new rents, hence reporting a lower annual growth than other indices. The Government have outlined their planned rental reforms in the long awaited Fairer Private Rented Sector White Paper. A suite of measures include the banning of Section 21 “no-fault” evictions and “arbitrary” rent review clauses, a doubling of notice periods for rent increases, allowing all tenants the right to request a pet in their house and outlawing a ban on renting to families with children or those on benefits.
COMMUNITY
If the pandemic has taught us anything, it is the value of community and who the real heroes are. Whilst it has been a difficult time for many of us, our key workers, teachers and volunteers consistently stuck to their tasks. Like many, we really admire this commitment and want to continue to support them by donating £100 from every sale we make again this year. So far, we have donated over £25,000 to schools and local organisations through our Community Fund. If you know of an established community organisation or local charity, based in Worcestershire that you feel should be on the list, of potential beneficiaries, please write to us and tell us why. Contact: community@nicolandco.co.uk